Black Monday

The financial services bailout bill just failed to pass the House with a bipartisan rejection

The bailout bill was a turd sandwich, but it was a necessary one to keep the markets from going into an absolute freefall. Which, coincidentally, is what’s going to happen now that the bailout is unlikely to happen.

I can understand the class warfare motives for the rejection, but when companies can’t get the money they need to make payroll, the people who were demanding Congress do nothing will face the consequences.

We are looking at a quadruple-digit drop in the Dow and a major credit contraction./p pHow bad could this get? I get the sinking feeling that we will soon find out.

UPDATE: The Dow plummeted 778 points today, the worst single-day drop in history. Yes, people don’t like the idea of bailing out large corporations. If that’s their position, then they should not be surprised when those large corporations can’t afford to pay them their payrolls.

I don’t much like economic hyperbole, but this time it’s true: we could be staring into the maw of a crippling economic depression. It won’t necessarily be like the Great Depression, but it could be the worse downturn in most of our memories. If Obama gets elected and follows his policy instincts, it will probably get worse.